The following is the abstract, introduction and conclusion of an article written by Shawn Shieh. It was published in April, 2017 in Voluntas: International Journal of Voluntary and Nonprofit Organizations. The full article can be viewed here. For a copy of the article, please email the author at firstname.lastname@example.org
The rapid rise of high-wealth individuals and foundations in China should be good news for China’s grassroots NGOs whose continued growth depends critically on their ability to mobilize domestic resources. As a number of Chinese philanthropy practitioners have noted, Chinese foundations and NGOs should be natural allies and strategic partners. Yet the reality is very different as foundations currently provide very little support to NGOs, particularly the more independent, grassroots NGOs that have few ties with the government. This paper examines the disconnect between Chinese foundations and grassroots NGOs, and whether progress is being made in closing the gap between them. It argues that one of the main reasons for the gap has to do with their very different development paths, which have engendered significant structural and cultural differences between the two.
On November 13, 2013 five Chinese NGOs presided over a China Foundation Ranking awards ceremony for Chinese and international foundations at the Shonnbrun Hotel in Beijing. The event was the culmination of a project started that summer to survey over 100 grassroots NGOs to ask them to evaluate both Chinese and international foundations. In the end, 50 Chinese foundations and 98 international foundations and NGOs were evaluated on five criteria, and the top five Chinese foundations and the top five international foundations were given an award at the November ceremony.
The China Foundation Ranking was the latest in a series of events held to reflect on the Chinese philanthropy sector’s development. While many foundations have appeared, they have been criticized by many in the sector for being too removed and not engaged in promoting the development of the sector or supporting the work of Chinese NGOs. The China Foundation Ranking event was unique in being the first to ask grassroots NGOs to engage in a public evaluation of foundations. As a piece of advocacy, it could be seen as an effort by NGOs to get foundations to re-evaluate their work with, and support of, NGOs. As Chen Yimei, the former executive director of China Development Brief, noted “[the China Foundation Ranking] helps to make foundations realize that they should treat NGOs with more equality in their partnerships, rather than just assume a top-down relationship….” About the event’s timing, she added, “It’s a critical moment, a time when foundations are thinking about their operating model and the philanthropy sector is contemplating whether we should have more grant-making foundations” (Bannister 2014).
This paper examines why Chinese foundations and NGOs, which conceptually are part of the same civil society universe, are so different in their views and approaches, and whether or not progress is being made in closing the gap between them. As a number of Chinese philanthropy practitioners have noted, foundations and NGOs should be natural allies and strategic partners (Liu 2009a, 2010). When asked why the two have such a hard time cooperating, a number of reasons were offered. Some note that it is because foundations have a difficult time communicating with and finding capable NGO partners. Others blame the lack of collaboration on the newness of Chinese foundations and their lack of a clear mission, and their preference for carrying out their own projects rather than funding NGOs. Other reasons given are that foundations lack confidence in NGOs, are driven by corporate interests, and tend to fund organizations and projects that are not politically sensitive (Anonymous 2013a).
While these explanations all have some truth to them, they suffer from focusing the blame on one side and glossing over their historical and structural differences. In this paper, we propose that to better understand the lack of cooperation between Chinese foundations and NGOs, we need to look past their conceptual similarities and understand their distinct development paths. These development paths, and the structural and cultural differences they have engendered, can be helpful in explaining why foundations are reluctant to fund grassroots NGOs.
Our arguments are based on a review of the existing literature and recent surveys of both foundations and grassroots NGOs, and semi-structured interviews with 16 Chinese foundations, and philanthropy/NGO experts and practitioners. This paper is divided into several parts. The first section explains key concepts and issues, and defines the scope, of our research. The second section examines the different development trajectories of foundation and grassroots NGO development in China over the last few decades. The third section uses these trajectories to explain the obstacles standing in the way of Chinese foundation grant-making to grassroots NGOs. The conclusion discusses some promising signs of recent collaboration between Chinese foundations and grassroots NGOs and offers some preliminary observations about where we can expect progress on foundation grant-making in the near future.
In this paper, we have argued that different developmental pathways taken by public fundraising foundations (PFFs, gongmu jijinhui), non-public fundraising foundations (NPFFs, feigongmu jijinhui) and grassroots NGOs can help explain the challenges standing in the way of greater collaboration between these two types of foundations and NGOs. We want to caution against over-exaggerating the explanatory power of these distinct developmental pathways. Not all PFFs are embedded so deeply into the official system, and not all grassroots NGOs have been equally influenced by international funding and values. What the path-dependent argument alerts us to is the existence of broad historical-structural forces in shaping similar civil society groups in very dissimilar ways. We argue that it is important to recognize these forces at work to clearly understand the scale of the challenges involved for China to make the transition from a statist philanthropic ecosystem to one that draws more heavily on social forces and resources. It will take many years of exchanges, training, education, advocacy and policy changes to overcome structural and cultural obstacles that have been in the making for decades before we see a substantial number of Chinese foundations play a role as innovative and effective grant-makers, and the development of a more rational, effective and societal philanthropic ecosystem.
Fortunately, the last few years have seen some promising signs of foundations and grassroots NGOs collaborating to overcome the obstacles erected by their distinct pathways, most notably in the NPFF sector where the developmental legacy carries less weight. One important initiative was the establishment of the annual China Private Foundation Forum which organizes sessions around collaboration between NPFFs and grassroots NGOs and invites NPFF and NGO leaders to come together to discuss these issues and find ways of addressing them. Another is the models provided by NPFFs, such as Narada, YouChange, Vantone, and Alashan SEE, which took a early leadership role in promoting grant-making. Foremost among these is Narada which has been the most consistent in its support of the development of civil society and philanthropy in China, and has established programs such as the Gingko Fellows Program (yinxing jihua) and the Bright Way Program (jinghang jihua) to provide core support to leading grassroots NGOs. As comment 11 in Table 2 points out, a major reason for the lack of grant-making is that Chinese foundations lack a critical mass of successful role models in this area. Narada has become such a model and was cited by several newer foundations such as the China Charities Aid for Children Foundation, Xinping Foundation and the Dunhe Foundation, as playing an important part in influencing their decision to engage in grant-making.
Another promising development is taking place among smaller, more local or community-oriented foundations such as the Guangdong Harmony (Qianhe) Foundation, Western Sunshine Foundation, China Charities Aid for Children Foundation (CCACF), and the Shanghai United Foundation. With the exception of Western Sunshine which at this point is still largely an operational foundation and has only one grant-making program, the rest have a strong commitment to grant-making and supporting grassroots NGOs. Western Sunshine which works in the area of improving rural education sees itself as an operational grassroots NGO and took advantage of the 2004 Foundation Regulation to register as a local NPFF. But because of its grassroots origins, it felt an obligation to do some grant-making and started up a grant-making program in 2010 as soon as it had accumulated sufficient funds.
Guangdong Harmony, Shanghai United, and CCACF have set up creative platforms to help raise funds for grassroots NGOs. Guangdong Harmony, a NPFF, solicits private donations from small and medium-sized companies and other local NPFFs in Guangdong, and even international foundations such as Oxfam Hong Kong and Rockefeller Brothers Fund. It then uses those donations to fund the work of grassroots NGOs in areas such as environmental protection and labor (Interview with foundation staff in Guangzhou, May 30, 2014). When asked if their corporate and local NPFF donors were wary about donating funds that would go to grassroots NGO projects, the Guangdong Harmony staff member responded that they were initially. But the foundation found that if they explained that grant-making was a more sustainable way to get support to target communities, and were clear in their monitoring and evaluation of these projects, the donors would generally understand. She also added that the corporate donors did not care that much if the NGOs did not promote their brand because they were mostly small and medium-sized manufacturing enterprises that did not have a strong brand identity.
As PFFs which contribute a substantial part of their resources to grant-making to grassroots NGOs, Shanghai United and CCACF stand out as exceptional cases in the PFF landscape. Both not only do grant-making but also provide other forms of resources and support to grassroots NGOs. One of those resources is their public fundraising power which they confer on grassroots NGOs through the mechanism of special accounts (zhuangxiang zijin) managed by the foundation. Through these special accounts, NGOs are then able to raise funds through public channels to directly support their own work (Wang 2010b). In addition to the special accounts, CCACF also engages in “joint fundraising” (lianhe quanmu) with grassroots NGOs. The concept of “joint fundraising” follows the U.S.-based United Way model in which CCACF partners with NGO partners to carry out fundraising using CCACF’s online and offline platforms and logo. The CCACF executive director noted that they discovered giving seed funding to grassroots NGOs was often not sufficient, and that “joint fundraising” helped build their capacity further because by participating in the fundraising, the NGOs learned how to appeal to donors and the importance of transparency and accountability in strengthening donor trust in them.
Keeping in mind our argument about developmental pathways, these foundations have a few things in their favor that allowed them to bridge the divide between foundations and grassroots NGOs. Perhaps the most important is that their own developmental pathways overlapped with those of grassroots NGOs. The most obvious cases are Guangdong Harmony, Shanghai United and Western Sunshine whose core founders and board members come from the grassroots NGO sector. Guangdong Harmony’s key founders and board members all have substantial experience in the NGO sector. Their main founder studied NPO Management at Harvard, founded the Lion’s Club in Guangzhou and was secretary-general of another grant-making NPFF, Alashan SEE. Another key board member has directed the Civil Society Research Institute at Sun Yat-sen University for years. Shanghai United’s founder and main investor is the NGO Nonprofit Incubator (NPI) which was set up to incubate grassroots NGOs. Western Sunshine, as already mentioned, started off as a grassroots NGO which was founded and later managed by people who had been instrumental in founding one of China’s first grassroots environmental NGOs, Friends of Nature. Among these four foundations, CCACF’s development has probably the least overlap with grassroots NGOs. It was founded by three officials who had retired from the Communist Youth League, so it started off being very much inside the official system, but their advisor was Xu Yongguang who headed the Narada Foundation and had also spent much of his earlier career in the Youth League, and advised CCACF to do grant-making.
Another factor is that these foundations are quite young, smaller in scale and more local in their orientation. Their relative youth is particularly important in the case of the two PFFs, CCACF (2010) and Shanghai United (2009). Both were able to register during a period when it has become easier to register as a local PFF. In the past, registering as a PFF generally required close ties with someone in the official system, but in recent years a few foundations founded by grassroots NGOs or private individuals such as Jet Li have managed to register as a local PFF. As a result, we now have a few PFFs being established that are structurally not part of the official system and culturally were not raised in China’s statist philanthropic environment, and thus have more room to maneuver in terms of their orientation. The local or community-oriented nature of the foundation may also be important in alleviating concerns about grassroots NGOs not doing enough for the foundation or corporate brand. As the case of Guangdong Harmony suggests, local SMEs and NPFF donors appear to be less concerned about brand, although CCACF admits it is still difficult getting some corporate donors to agree to use their donations for grant-making. In 2013, the percentage of CCACF’s budget devoted to grant-making declined from 70–80% to about 40%, although the number of NGOs they supported rose slightly (Interview with foundation staff in Beijing, May 23, 2014). This trend may be a concession to their donors, and suggests that PFFs do have more disincentives to do grant-making than NPFFs as long as corporate and public donors continue in their present mindset.
These cases show that, given the right conditions and using creative mechanisms to reduce donor concerns about risk and brand, a small but growing number of foundations have been able to overcome the developmental legacies discussed here. Generally, these cases will be found more often among NPFFs than PFFs, among foundations whose founders and board members have been influenced by other grant-makers, and among younger, smaller, more locally oriented private, community and family foundations where concerns about risk and brand are less pronounced. Even for PFFs, the examples of CCACF and Shanghai United show that donor concerns about risk and brand can be addressed through donor education and other creative means to support grassroots NGOs such as the use of “special funds” and “joint fundraising” which lowers the risk to the foundation and places more of the responsibility and accountability for the funding on the NGO itself.